Politics revives gold fever in US

Investors are turning again to gold as a safe haven. But they may not know of the tax risks associated with owning a collectible item.

By Jonathan Berr Dec 11, 2012 12:59PM
Image: Gold (Comstock Images/Jupiterimages)Sales of American Eagle gold coins, the most popular type made by the U.S. Mint, have soared more than 131% in November, the most in two years, as investors brace themselves for the possibility of the economy going over the fiscal cliff. Sales of Canadian coins also have skyrocketed, according to The Financial Times.

Gold has been seen as a safe haven for investors since at least the Middle Ages. Prices for the precious metal have jumped 9% this year, spurred by the monetary easing policies of the Federal Reserve and other central banks, according to Reuters. They may move higher if the Fed decides to undertake more bond purchases.

President "Obama did me a favor in some ways," Chicago jeweler Tobia Kahn told the FT. "Now people are buying gold and jewels not because they like them but because of fear. They’re trying to protect their wealth."

Folks are also worried about their guns. Sales of firearms soared in the weeks after the reelection of Barack Obama as people worried that the incumbent Democrat and his allies in Congress were going to crack down on sales of firearms, particularly assault weapons. Sales will eventually return to their normal rates as people realize that the chances of new gun control laws being enacted are slim to none. Gold prices will eventually retreat as well once the fiscal cliff is resolved, and it will be -- one way or another.

Meanwhile, people should cure their gold fever with gold-mining stocks or funds that own them instead of coins. Many investors may not realize that gold coins are considered by the Internal Revenue Service as a "collectible" with a capital gains rate of 28%. This even applies to exchange-traded funds that hold physical gold. Gold-mining stocks and funds that hold them are subject to this rate.

Hoarding gold coins does not make much economic sense unless you are certain that the U.S. economic system is going to collapse and you will need them for bartering purposes.

--Follow Jonathan Berr on Twitter @jdberr


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18Comments
Dec 14, 2012 1:13PM
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P.S. When the dollar collapses, paper investments like gold stocks will be worthless. An ounce of gold is always worth an ounce of gold--that doesn't change.
Dec 14, 2012 1:10PM
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Wall Street scare tactics.
If a 1750USD gold coin doubles in price, and you sell at 3500 US fiat dollars (which are intrinsically worthless). Even a 28% tax leaves the gold seller 1260 US fiat dollars ahead. Stocks will never double.  A stock will never double. Even a split is not a doubling.
Also, don't buy coins. You pay a premium now but in hard times the premium is worthless; only the gold weight counts. Been there. Done that.
Besides, fiat dollars are what they are: W-O-R-T-H-L-E-S-S. Oil producing nations are refusing the USD. China is already setting up a currency exchange that doesn't include dollars--many other important nations have joined. Because of Democrook and Republicon fiscal malfeasance, the USD will no longer be the world currency (part of the "fiscal cliff" being hidden from you by lame stream media). When that happens, the cartel supported by the illegal Federal Reserve will collapse, a.k.a., the banking system . Yes, in your lifetime.
Get educated so the politicians can't lie to you anymore.
The "Cliff" is way more than the criminals in D.C. are willing to tell.
Moral: you cannot trust the fed.gov or Wall Street.
Dec 12, 2012 2:13PM
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Just read this on another article.

"A controversial "drum major" inscription will be removed from the Martin Luther King Jr. Memorial.  Workers will scratch off the wording on the east side of the memorial and match the west side with new striations in order to make the look consistent.

The makeover will cost between $700,000 and $900,000."


To me, the bigger story here is;  Why the heII does it cost almost a MILLION DOLLARS to replace one sentence?????               And people wonder why the country's broke.........




Dec 12, 2012 1:17PM
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Wasting time with Gold...huh, well maybe, BUT we only invest in Miners, so basically we are invested in Gold....But as an Equity or Stock, works for us !!

And sometimes works quite well....Bought  a little more today, even.

Dec 12, 2012 1:13PM
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Okay....I believe Am.Eagles, Can. Maples and Kruggerands(sp) are considered "collectibles"

under American IRS Laws....Along with bullion and other semi- or precious items of Jewlery or Metals.

SO I THINK, Jonathan is correct ?? As he stated....

 

But then I somewhat AGREE, with Tummy and Notso....

Barter and quiet trades are probably best way to go, BUT you walk a thin line and are basically pulling off something that is questionable...IMO.

And could be illegal by Law...?

But hell I kinda look at it this way, are you worst then the Rich Elitest, with off shore or

The Big Corps with their deposits outside of U.S.  They just hide and conform to what THEY think is right. 

Dec 12, 2012 12:39PM
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www.ihavecoins.com will both buy your coins,give you a fair appraisal before you sell to them or sell you coins.
Dec 12, 2012 11:43AM
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Bribed politicians destroyed this County.

History of Retro Active Immunity from Prosecution.
1. Granted for the illegal merger of six large banks back in 1964. (Too big to fail)
2. Granted for illegal wire taps. ( Fisa bill that led to the patriot act)
3. Granted for illegal use of torture.
4. Granted to Judges for excepting money that was not authorized by law. (SBX211)
All of our problems arise when government is above the law and when Corporations can pay politicians to grant them amnesty from the law. Nobody should be above the law. NOBODY
Dec 12, 2012 11:17AM
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Life is great!

 

Chris Van Hollen & Elizabeth Warren in 2016 & 2020!

 

God bless Mom & Pop stores!

 

God bless unions and living wages!

 

DIE big and unregulated corporations and DIE Ayn Rand Capitalism, DIE!

 

God bless America!

Dec 12, 2012 10:11AM
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Who in their right mind would show a private sale of their personal gold coins and pay tax? 
Dec 12, 2012 9:37AM
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bad info here.  US gold coins are considered a currency that is why they can't be confiscated and they are not subject to capitol gains tax.  Jonathan should remove his head and take a breath of air.  I can't believe that more people don't trade gold us coins buy low sell high no tax at all and yes I've done it many times. 
Dec 11, 2012 11:40PM
Dec 11, 2012 4:55PM
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You`re wasting your time with gold.That`s Archie Bunker thinking.When the fiscal

cliff is fixed the market will go thru the roof.

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